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Apple is patenting gamepads for the iPhone and iPad, according to this article.

This is good news because, let’s face it, controlling games with your finger and tilting sucks for just about everything besides driving games, puzzle games, and gimmicky apps.

Many types of games are just NOT possible.
Examples:
Megaman, Super Mario Bros., and any game that requires more precise control than can be achieved with a hot dog.

Attempts have been made to port some arcade classics, and most are terrible.

Putting a “controller” on the touch screen is just plain awful.

The bad news, or course, is that not everyone will have the gamepad. And even if you have the gamepad, you’re not likely to have it with you every time you want to play a game. Thus, games will have to be designed to support the standard control scheme anyway.

The best scenario would be to have actual physical buttons on the iPhone. However, this will never happen. Apple has spent a lot of money and energy to convince consumers that there is no need for physical buttons.